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Exam 5: National Income Accounting

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Question 31

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Which of the following would not be included in the calculation of GDP?

A) Income earned by an attorney.
B) Income earned by a CPA.
C) Contract work performed by an electrician.
D) Tips earned by a bartender who does not report them to the IRS.

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Question 32

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Table 5.1 National Income Accounts (dollar figures are in billions) $\begin{array}{|l|r|}\hline \text { Expenditures for consumer goods and services } & \$ 4,565 \\\hline \text { Exports } & \$ 740 \\\hline \text { Government purchases of goods and services } & \$ 1,465 \\\hline \text { Social Security taxes } & \$ 510 \\\hline\text { Net investment } & \$ 225 \\\hline\text { Indirect business taxes } & \$ 520 \\\hline\text { Imports } & \$ 825 \\\hline \text { Gross investment } & \$ 865 \\\hline \text { Corporate income taxes } & \$ 185 \\\hline \text { Personal incometaxes } & \$ 750 \\\hline \text { Corporateretained earnings } & \$ 45 \\\hline\text { Net foreign factor income } & \$ 20 \\\hline \text { Govermment transfer payments to households } & \$ 690 \\\hline \text { Net interest payments to households } & \$ 0 \\\hline\end{array}$ On the basis of Table 5.1,personal saving is

A) $1,215 billion.
B) $305 billion.
C) $205 billion.
D) $1,130 billion.

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Question 33

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Which of the following is treated differently in computations of GNP as compared with GDP?

Suppose you volunteer to help clean up your neighborhood,and the only payment you receive is the sense of goodwill that develops with your neighbors.Your efforts cause the GDP of the economy to

Which of the following is investment,according to an economist?

In Figure 5.2,the fact that real GDP is greater than nominal GDP during the 1960-1980 periods implies that

How are total output and total income related to each other,and why?

The GDP per capita is the most practical way to

The value of final output produced in a given period,measured in current prices,is

Which of the following typically purchases the most goods and services in the U.S.economy?

Table 5.2 National Income Accounts (dollar figures are in billions) $\begin{array}{|l|r|}\hline \text { Expenditures for consumer goods and services } & \$ 2,850 \\\hline \text { Exports } & \$ 300\\\hline \text { Government purchases of goods and services } & \$810 \\\hline \text { Social Security taxes } & \$ 295 \\\hline\text { Net investment } & \$510 \\\hline\text { Indirect business taxes } & \$ 445 \\\hline\text { Imports } & \$450 \\\hline \text { Gross investment } & \$700 \\\hline \text { Corporate income taxes } & \$ 190\\\hline \text { Personal incometaxes } & \$ 875 \\\hline \text { Corporateretained earnings } & \$ 210 \\\hline\text { Net foreign factor income } & \$ 0 \\\hline \text { Govermment transfer payments to households } & \$780 \\\hline \text { Net interest payments to households } & \$ 20 \\\hline\end{array}$ On the basis of Table 5.2,depreciation is

If GDP per capita was $500 in 2002 and the population was 25,000,the GDP would have been approximately

Suppose a friend claims he is helping the economy by throwing trash on the street rather than in trash cans because the extra expenditures necessary to clean up the streets will increase GDP.Your friend is

Table 5.3 National Income Accounts (dollar figures are in billions) $\begin{array} {| l | r| } \hline \text { Expenditures for consumer poods and services } & \$ 8,200 \\\hline \text { Exports } & \$ 1,700 \\\hline \text { Government purchases of poods and services } & \$ 2,500 \\\hline \text { Docial Security taxes } & \$ 1,900 \\\hline \text { Net irvestment } & \$ 1,400 \\\hline \text { Indirect business taxes } & \$ 1,400 \\\hline \text { Irnoorts } & \$ 1,900 \\\hline \text { Gross irvestment } & \$ 1,800 \\\hline \text { Corporate income taxes } & \$ 600 \\\hline \text { Personal income taxes } & \$ 1,500 \\\hline \text { Corporateretained earnings } & \$ 130 \\\hline \text { Net foreipn factor income } & \$ 100 \\\hline \text { Government transfer payments to households } & \$ 1600 \\\hline \text { Net interest paynnents to households } & \$ 500 \\\hline\end{array}$ On the basis of Table 5.3,the value of the income aggregate that is defined as "total income earned by current factors of production" (also known as national income) is

Real GDP is the

If a friend helps you with your homework,it will not be calculated in the GDP accounts.But if you hire a tutor who reports the income,the services will be counted in GDP.

The measure of the part of disposable income that is not consumed is

Table 5.2 National Income Accounts (dollar figures are in billions) $\begin{array}{|l|r|}\hline \text { Expenditures for consumer goods and services } & \$ 2,850 \\\hline \text { Exports } & \$ 300\\\hline \text { Government purchases of goods and services } & \$810 \\\hline \text { Social Security taxes } & \$ 295 \\\hline\text { Net investment } & \$510 \\\hline\text { Indirect business taxes } & \$ 445 \\\hline\text { Imports } & \$450 \\\hline \text { Gross investment } & \$700 \\\hline \text { Corporate income taxes } & \$ 190\\\hline \text { Personal incometaxes } & \$ 875 \\\hline \text { Corporateretained earnings } & \$ 210 \\\hline\text { Net foreign factor income } & \$ 0 \\\hline \text { Govermment transfer payments to households } & \$780 \\\hline \text { Net interest payments to households } & \$ 20 \\\hline\end{array}$ On the basis of Table 5.2,disposable income is

The social well-being of a country

Which of the following is directly included in the calculation of GDP?